“A passion for exploration is the fuel to an innovative economy” – Neil deGrasse Tyson

Growing up to become an astronaut is a childhood dream for many. For centuries, space has ignited a sense of adventure and exploration in the public, fuelling our imagination as we seek to understand our place in the universe. Nonetheless, it has not stopped either the public or private sectors from realising the untapped potential of space for their respective economies, from its developments in technology to space-based goods and services. Thus, a new economic phenomenon – the New Space Economy is born.    


The New Space Economy refers to the emerging and rapidly evolving sector of the global space economy, focusing on the commercialisation and innovation of space exploration and utilisation. While countries such as the United States, Russia, and China have been well-established in this sphere for decades, Malaysia has recently recognised the untapped potential of space towards its national economy.  


In September 2023, Malaysia’s Ministry of Science, Innovation, and Technology (MOSTI), through the Malaysian Space Agency (MYSA), announced plans to develop a space launch site, aiming to establish a presence in the space industry.


With rapid advancements in space technology, a significant decline in launch costs, and steady interest from public and private sectors, it is unsurprising that the global space economy was valued at an estimated $546 billion in 2022, and is projected to evolve into a trillion-dollar industry by 2040. These developments may signal a shift in the focus of space activities from one of exploration to commercialization. Amidst this surge of activity and advancements from nations worldwide, where will Malaysia stand in this new space economy?


Part 1: The Economics of Space

Space economics can be categorised into the space industry and the commercial use of space, the space industry and commercial use of space. The space industry encompasses economic activities related to the manufacturing and delivery of components destined for outer space, namely satellite and launch site manufacturing. Commercial use of space, or the new space economy, is the provision of space-based services of commercial value, such as satellite navigation and the now widely discussed space tourism. Overall, the space industry has experienced steady growth, extending its reach beyond the aerospace and defence sector to include the IT hardware and telecom industries.

Venturing beyond Earth’s orbit is not cheap. Government support, exemplified by institutions like NASA in the United States, has been synonymous with space exploration for decades. Governments and superpowers have usually been the only institutions with the tax revenue to fund the space sector’s extensive operating costs. Agencies like NASA frequently award contracts to firms such as Lockheed Martin, Boeing, and SpaceX to contribute to the production processes in the space industry. NASA then employs the spacecraft provided by these firms for research purposes.


It is also worthwhile to mention that the genesis and intensification of the space race between the United States and the Soviet Union during the Cold War were primarily driven by geopolitical considerations and economic ideologies (capitalism and communism, respectively), rather than quick monetary gain..

Part 2 : Economic Benefits

One of the economic benefits of the private sector’s involvement in the space industry is competition. The alliteration attracts and incentivises firms within the industry to actively minimise production costs and increase innovation.  


Governments’ hold on the sector changed with Elon Musk’s SpaceX launching the Falcon 1, the first privately developed and funded rocket to cross Earth’s orbit. Not only did the spacecraft’s development and launch cost $390 million, significantly cheaper than the customary billions NASA typically spend on their rockets, but it also led to SpaceX later designing the Falcon 9the world’s first orbital-class reusable rocket. The reusability was a game-changer since the reusability allowed SpaceX to refly the most expensive parts of the rocket, driving down the costs of space access. In comparison, NASA and other space agencies would typically dispose of their rocket debris in the ocean. 


“Why should we spend money on NASA when we have so many problems on Earth?”Mark Rober


This economic question was raised by Mark Rober, a YouTuber who ironically, is a former NASA engineer himself, in his video titled “Is NASA a waste of money?” However, it prompts us to consider, what is the economic value or return on investment of spending millions, if not billions, to send people and technology into space. 


The biggest commercial value provided through space is satellite communication services. From consumers and companies utilising internet and broadcasting services to research agencies being able to monitor and measure critical information on Earth’s land and weather patterns, satellite communications have provided a reliable and effective means for global connectivity.This connectivity fosters international trade, business collaborations, and financial transactions, driving economic growth in ways unprecedented before its conception. Furthermore, these systems play a pivotal role in disaster management, weather forecasting, and navigation, safeguarding human lives and property while also improving the efficiency and safety of transportation and logistics. Satellite communications are an essential component of the global economy, facilitating information exchange, and economic development across diverse sectors and industries. Satellite data can provide valuable information to tackle issues like climate change; over 160 satellites are currently monitoring Earth to assess the impact of global warming. Food security and even national security are vastly improved with these macro insights and perspectives. 


A more speculative realm of the new space economy is asteroid mining, involving the extraction of materials from asteroids or planets. Asteroid mining could, theoretically challenge one of the fundamental concepts of economics. The principle of scarcity in economics posits that our wants are unlimited while resources are limited, but what happens when the near-infinite scope of space yields deposits of valuable minerals like gold, silver, platinum, iron, and nickel worth quintillions of dollars? Despite the prospects of potential riches and the means to develop more technology, researchers at Tel Aviv University have claimed asteroid mining may not as much disrupt but instead dismantle the global economy for raw materials, especially affecting countries reliant on resource exports. Ultimately, asteroid mining is far too expensive to be a practical option at present.      


Research and development (R&D) is also a crucial force in driving economic growth as it fuels innovation and technological progress. Developments in the space industry and its technology have long since contributed to many pieces of technology that are commonplace today. Notable examples include camera phones, wireless headsets, and portable computers.

 Part 3: Malaysia’s Standing

Now that we have explored the economic returns of investing in the space sector, how does Malaysia plan to fare in this space race? For one, MOSTI and MYSA’s plans for the development of a space launch site seek to capitalise on Malaysia’s strategic location near the equator, making launches more energy-efficient and cost-effective, resulting in competitive operating costs. 


It’s crucial to recognize the first-mover advantage Malaysia stands to gain by venturing into the space economy. Successfully establishing a space launching facility would position Malaysia as the ninth country in the world to possess such a facility. Additionally, Malaysia’s strategic geographical location near the equator provides a significant advantage in developing the facility.


Malaysia has taken up several initiatives, including the Malaysian Space Exploration 2030 Initiative and Space Industry Strategic Plan (SISP 2030), These initiatives concentrate on the R&D of space-related technology, funding for the space industry’s programs, the development of local talent, and the creation of institutional frameworks as principles for the guidelines of the space industry. 


Regarding the specific goods and services being capitalized on in the space sector, Malaysia appears to be focusing on specializing in satellite communications. Satellite communications are incredibly important in delivering real-time data such as the changes in sea levels, ocean temperature, and other indicators of climate change. Satellites can provide early warnings to flood-prone Malaysian states, such as Terengganu and Kelantan, that are prone to natural disasters like floods. The Straits Times reported that due to the 2022 floods, Malaysia recorded a total of $187.8m in losses. Without a doubt, this specialized focus on satellite communications will certainly minimize national economic losses due to natural disasters.


Currently, Malaysia’s space industry generates about RM20-30 million annually but there is potential for more growth. Science, Technology and Innovation Minister Chang Lih Kang said that the government’s involvement in their venture could lead to the creation of 500 space-related tech start-ups and 5000 job opportunities, as well as contribute RM10 billion to Malaysia’s GDP by 2030.


Although the industry for space technology has been traditionally dominated by wealthier nations, the decreasing costs have lowered the barriers to entry for developing nations like Malaysia. Presently, Chang and MOSTI are planning a national remote sensing satellite program through public-private partnerships, which is expected to commence in 2026.

Part 4: Malaysian Space Industry 

How is Malaysia integrating space into its own economy? Based on the Space Industry Strategic Plan (SISP) 2030, we can see the economic trajectory is shifting towards the space economy through investments in satellite technology, data analytics and artificial intelligence.


Smallsats such as nano-satellites or CubeSats are currently being developed in Malaysia. These types of satellites are deemed favourable mostly due to of their short development time and cost-effectiveness while maintaining brilliant functionality.


Artificial intelligence consistently generates substantial interest but data analytics shouldn’t be overlooked. Malaysia aspires to develop more talents specialising in data analytics, a vital skill in the aerospace sector. The synergy of both AI and data analytics would be an unstoppable force when it comes to reinforcing Malaysia’s economy.


Regrettably, the privatization of space-related technologies has resulted in domestic players being out of reach with advanced global players. This will potentially erode the market share of the domestic industries associated with space technologies. However, rest assured as SISP 2030 has planned to ensure that Malaysia emerges as a prominent player player in the space economy.


Part 5: Space Debris – Risks and Challenges 

Like any other venture, it is also important to factor in the potential risks that come when diving into the space economy. On February 10, 2009, two communications satellites – one active commercial and the other a derelict Russian military satellite —inadvertently collided at a speed of nearly 12 km per second. The fallout led to both satellites breaking into over 2000 pieces. This has caused an increase in space debris but a question in mind is, what are the effects?


Space debris may appear to be a small problem, just like the size of the debris itself. However, bear in mind that such debris is moving at 15000 miles per hour. At this speed, what once seemed small can even puncture a spacesuit! Even worse, it can damage sensitive electronic devices on spacecraft as well.


A dramatic increase in space junk since the 1960s will probably hinder the advancement of aerospace technologies and cause delays in the development process on Earth. 


In addition to the rise of carbon emissions and pollution produced directly as a result of space travel, there are a myriad of challenges that still need to be addressed to ensure that the space economy remains sustainable for future generations.  


What can we do as youths to contribute to Malaysia’s space economy? 

In the meantime, we as the youth of Malaysia can: 

  • Pursue a strong educational foundation in STEM (Science, Technology, Engineering, and Mathematics) and consider degrees in disciplines such as aerospace engineering, astrophysics, computer science, economics or business management 
  • Stay informed with the latest developments in the space industry 
  • Identify specific niches within the space industry, eg. space exploration, satellite technology, space tourism or space policy and develop our expertise in those areas


As the government aligns the nation with the Malaysia Space Industry Strategic Plan 2030 (SISP 2030), discussions about utilising space as a source of revenue are heated; but what is the nation’s action in this domain? Little by little, we can see the sparks of interest in aerospace rekindling in the younger generations as news about SpaceX is now the talk of the town. Simultaneously, we can observe a positive trend in this specialised field evident in the government’s active review of international treaties related to the space sector. Undeniably, these efforts are positioning Malaysia to be a part of the international space community, offering benefits to the nation in ways that are able to enhance the lives of its people


In conclusion, it is clear that there are significant economic benefits that can be reaped from the space economy. However, though Malaysia has shown initiative and promises to become a strategic and competitive player in Southeast Asia’s space race, the question still remains: How feasible will this be?


Relation between economy and GDP Per Capita | NASA

Public-private partnerships | the ISS National Laboratory

Flood, Terengganu and Kelantan worst hit | Straits Time

Thousands of high-value jobs from Tesla, SpaceX investments, says PM | Free Malaysia Today

How will the space economy change the world? | McKinsey 

Malaysia sets ambitious goal to establish its own space launch site 





What is the Space Economy? | The European Space Agency

The space economy is booming. What benefits can it bring to Earth? | World Economic Forum

5 Ways the New Space Economy Can Improve Human Life on Earth | MIT





Researchers: Evan, Cheryl, Aneesa

Editor(s): Quincy Jules Tan

Reviewer(s): Maryam Nazir Chaudhary

Designer(s): Nur Farihatun Nisa

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